Implementing a robust cost estimating process
Management & Lessons Learned Track
How do cost estimating entities bring value in an organisation and how can survive such groups through time?
These questions may not have easy answers and many counter-examples of short existence are observed both in industrial companies and procurement agencies. They tend to resurface later on in different forms but in most of the cases this reshuffling is accompanied with significant loss of experience, qualified personnel or even loss of reference data and cost models.
Their robustness is then a matter of concern in the profession and for any organisation intending to preserve its investments. It should be remembered that a lot of the experience of the cost estimators is coming from confronting past estimates with received prices or cost at completion. This, in the aerospace sector, takes several years before it occurs so the survivability of these entities is of paramount importance to complete the expertise acquisition cycles.
This paper is not going to talk about cost models as such but will rather focus on all peripherals activities and processes that allow the cost modelling entity to be trusted and recognized within its own organisation. This analysis is based on how the ESA Cost Engineering has treated this matter and describes key concepts put in place over the past few years.
H. Joumier (born 1958) has joined the European Space Agency in Noordwijk (Netherlands) in 1998 where he holds now the position of Head of ESA Cost Engineering. He has developed a group of high profile Cost Engineers currently involved in a wide variety of projects early phases, supporting negotiations with Industry, participating to the implementation and running of an integrated design centre where they hold time to time the position of System Engineer or Team Leader. He has been working for twenty years in Space Industry starting with ALCATEL through different assignments from Project Controller to Commercial Engineer (1987- 1998) and had previously similar experience in the Oil and Gas Industry (1981-1987) with TECHNIP.
H. Joumier is a life member and Director at the Board of ISPA, Chairman of the ISPA 2008 Organisation Committee.
He is a member of the SSCAG (Space Systems Cost Analysis Group) where he brings some contribution to the different sub-groups on methodologies such as the development of precursor models.